BC Hydro attacks conflict allegation
COMMENT: Juicy stuff! Brookfield says BC Hydro is in a conflict of interest by evaluating private project proposals when it is developing its own project (Site C). It claims Hydro may be using info gathered in the power calls to, um, well, perhaps, improve the case for Site C. It even suggests that the high attrition rate of projects accepted by way of the calls is because BC Hydro essentially takes junk bids from unqualified companies.
Addendum: On March 26, Brookfield wrote to the Commission, claimed constructive intent, and advised that it would "have no objection" if the earlier letter was struck from the record. link
Scott Simpson,
Vancouver Sun
March 30, 2009
A conflict of interest allegation levelled against BC Hydro by an independent power producer should be struck from the record at a B.C. Utilities Commission hearing, the Crown corporation says.
Hydro says it has been prejudiced by "unsubstantiated assertions" that Brookfield Renewable Power made in a recent 10-page letter to the commission.
In the letter, Brookfield alleged that Hydro is unsuited to the dual role of public utility and solicitor of private power bids because Hydro's own projects, such as the proposed Site C dam on the Peace River, are in competition with privately owned electricity generation.
It called on the government of B.C. to create an "independent, transparent, arm's-length entity to manage all electric generation procurement activities."
Hydro has declined comment, but both Energy Minister Blair Lekstrom and NDP energy critic John Horgan previously dismissed the allegations.
However, in response to a query from The Vancouver Sun, former Hydro fairness commissioner Michael Asner examined Brookfield's report and said that if it is factually correct, Hydro is in both an apparent and a potential conflict.
Hydro is reviewing the economic case for self-building Site C dam while simultaneously conducting a "Clean Power Call" aimed at attracting bids for new private power developments.
Both efforts have a single purpose: to increase electricity supply in B.C.
Hydro disputes Brookfield's assertion that the dual effort "serves to undermine confidence in the process as well as the market signals that drive investment decisions for IPPs in British Columbia."
"The assertion that BC Hydro is in a conflict of interest with respect to the Clean Power Call because it may advance self-build projects in the future is a very serious allegation which BC Hydro does not accept," said Hydro's statement to the BCUC.
"Nor does BC Hydro accept Brookfield's assertions concerning the so-called market impacts.
"What has been clearly established on the record is that BC Hydro has received 68 proposals from 43 registered proponents representing in aggregate some 17,000 gigawatt hours per year of firm energy in response to the Clean Power Call."
In response to Hydro's request, the Utilities Commission ordered Brookfield to file a response by last Friday, and gives Hydro until today to comment on Brookfield's response.
Brookfield Renewable Power comment to the BC Utilities Commission, 06-Mar-2009
Sample Electricity Purchase Agreement (EPA) from the Clean Power Call
More documents on EPAs and the Clean Power Call
Brookfield backs down, 26-Mar-2009
Brookfield backs down
March 26,2009
Ms. Erica M. Hamilton
Commission Secretary
British Columbia Utilities Commission
900 Howe Street, Sixth Floor, Box 250
Vancouver, BC
V6Z 2N3
Dear Ms. Hamilton:
Re: British Columbia Hydro and Power Authority ("BC Hydro")
2008 Long Term Acquisition Plan ("2008 LTAP")
BC Hydro's Objection to Comments of Jack Burkom, Director
of Marketing for Brookfield Renewable Power Inc.
We write in response to your letter of March 24, 2009, requesting a response to BC Hydro's letter of March 19, 2009. Capitalized terms used in this letter have the meanings attributed to them in your March 24,2009 letter.
The Brookfield Letter was submitted as a commentary document in the 2008 LTAP proceeding, and was not intended to be put forward as "evidence". Our intention was to be constructive in making comments on the process underway to provide British Columbia with more investment in new, renewable power assets producing electricity at the lowest possible cost. It was certainly not our intention to prejudice BC Hydro or suggest that BC Hydro has acted in any manner other than with full professionalism in all of its endeavours, and we regret if the wording of our comments implied otherwise.
In light of the foregoing, we would have no objection to the Commission striking the Brookfield Letter from the 2008 LTAP record.
Yours very truly,
BROOKFIELD RENEWABLE POWER INC.
Ben Vaughan
Chief Operating Officer